Should I Buy or Lease My Next Vehicle?
Not sure if Leasing or Buying a vehicle is right for you? Most people are more familiar with the car buying process vs. the leasing process. Leasing generally appeals to people who use cars for business, need a car for a limited period of time or trade in their cars at regular intervals. Below find an easy to read chart that helps to explain the differences. We've also provided a payment calculator to the right to help you figure out monthly payments for either leasing or buying your next car.
Buying a Car
- Monthly payments are applied to purchase of vehicle
- Monthly payments include financing charges
- Down payment usually is required
- When the car loan is paid, you own the car
- You can modify your car any way you want such as painting, accessories, etc.
- No mileage restrictions; however, higher mileage reduces the trade-in value of the car
- Car loans usually extend past the warranty period, so you'll be responsible for repairs
- Although you have maintenance and upkeep requirements, performing routine tasks is a good idea
Leasing a Car
- Monthly payments are applied to depreciation, not the purchase price of the vehicle
- Monthly lease payments are significantly lower than car loan payments
- A down payment often isn't required
- After the lease period is over, you need to lease another vehicle
- Exiting the lease early may require a payment of any remaining balance - Early termination penalties vary
- You must predetermine how many miles you drive per year
- Your vehicle usually is covered by the manufacturer's warranty for the duration of your lease
- You have to pay for any excess wear and tear and any mileage that goes over the pre-determined amount identified
